Do You Really Need a Credit Card?


Do you really need a credit card?

Do you know that financial management for an ordinary person like us necessitates that we keep off the financial comforts? One of them is the credit card.

Le's face it. Credit card is a loan facility that you can use anytime with ease.

That means you are on the mercy of temptation of giving in to merchants' job of loaning you in terms of products.

Do we really need credit cards?

In this guide, you will learn another great way to tone your personal financial management skills in preparation to save money even more.

A person who is into saving money and living frugally wouldn't put themselves into a situation where they would work extra so that they can pay interests and surcharges.

Financial management for ordinary working people demands avoidance of credit cards.
Credit card annual and membership fees added to the monthly interest definitely eat up a large chunk of your savings, which is not the way to go for a frugal person and serious in the management of their finance.

Once you have a credit card whether it is a visa card or otherwise, you ought to use it. If not, then you are throwing away the money that you have paid for the membership and annual fees of that credit card.

Maybe it's time to ask, “Do I really need a credit card?” To help you answer that, let's take a look at the select reasons why many people apply for credit cards.

Why people want credit cards?

Why people want credit card?
First-timers are excited at the prospect of having a credit card. They beam on the idea. But if you just look into it, really, it's just an expense for a frugal who manages their finance to save for the near future.

1. Prestige

Having your name printed on a card with the Visa or the Mastercard logo, we must admit, gives us the feeling of importance and credibility.

2. For emergency

Most of us fear to have an emergency occurrence in the family. It gives them peace of mind that if a family member gets sick, they can immediately buy medicines anytime.

3. Cashless shopping

It is so convenient. It eliminates the worries of lacking cash in your wallet. In the ego part, you are uplifted and proud to be signing a receipt in paying your purchases by card.

4. No interest installment promos

A number of individuals consider credit card as their ticket to furnish their homes with new appliances, and the likes in a yearly zero interest appliance installment plan offered few credit cards companies.

5. Reliable identification card

Except if you have a passport, there are institutions in the Philippines that require 3 IDs in processing applications. A credit card with your photo ID can be either a primary or supporting ID.

Do you need them?

Most first-time credit cardholders enjoy the prestige out of it. Do you need it?

Do you need — prestige, emergency cash card, cashless shopping, no-interest installment plan, and extra reliable ID card?

Let's tackle them one by one and discover if each of them is indispensable in your financial management, or not. You have to remember that your primary objective is to manage your income and finances to save money.

  • Prestige is something given to somebody who has attained success both in career and in finance. Nowadays, you're prestigious if you have a gold credit card. A prestigious person doesn't worry about spending. Frugality and prestige don't mix. Frugal people shun prestige.
  • You definitely need and should possess at all time a payment facility for emergency. But are you willing to pay for 2k pesos yearly? With a debit card, your need for emergencies is addressed just the same.
  • Cashless Shopping with a credit card takes a large chunk of time in payment counter for sure. As time saved is money saved, you're better off with a major bank atm card which is accepted with payment done much faster.
  • Zero interest monthly installment by using a credit card. Now this one is tempting. You better weigh your options here. But for me, it boils down again to a question, "Is annual fee worth it?".
  • As you're taking the path of frugal living for the secure future, I'll say you don't need a credit card for the purpose of having reliable ID. Passport doesn't need supporting IDs. Driver's license is primary ID, and police clearance card is excellent supporting ID.

When is it right to get a credit card?

When is the right time to get a credit card?
There are a few valid reasons for a frugal to go and get a credit card. And all these reasons boil down to either remaining the savings intact or making money off the credit card.

Why would you apply for a credit card? In the explanations above, we discussed the reasons that lean towards suggestions that you can skip applying for a credit card simply because the reasons are not sufficient enough. However, exceptions are always present in any rule. Below are few of those exceptions that you might reconsider give that credit application a go:

Free annual fee

Some major banks waive annual and membership fees. So there's no reason to worry about incurring unwanted bill on those expenses.

But be aware that most of the time it is just for the first year of being their cardholder.

You have to be clear on that and make sure to close your account before your second-year membership starts. Talk to the bank on your twelfth month.

Tip: During your first year, have an excellent payment habit. Don't use up your full credit limit and pay your balance before the due date. Banks don't want to lose valued customers so, they definitely waive your subsequent annual fee, if they see you have good credit.

Business purpose

You intend the credit limit for your small business. You are ready to rollover your money to a lucrative and "sure deal."

You are certain that you can pay your credit card amount due on its due date.

In this situation, your using the credit card to generate income. Paying annual fee here is justifiable.

Just make sure your start-up won't go southward. It's your credit on the line.

Secured credit

You secured your credit limit by a deposit. But to be practical for a person who's into saving money, two components must be present.

  1. First, you have already accumulated a savings deposit. And you are willing to convert it to time which yields high interest. Only a part of this time deposit secures your credit card limit. So, your money earns while you enjoy being a credit card holder.
  2. Second, no annual fees whatsoever. Talk to your bank manager for available options. If you're a client for quiet a while, the odds are in your side.

Establishing credit

Saving money is just the start of securing one's future. Later on, you might mull over about founding your own business.

In reality, there is no business without a loan.

As the business grows, the operation needs more funding as business owners themselves most of the time sell on credit.

As you're always younger today than next day, you need to build your credit — today.

The good way to start is to have a good credit history with a credit card provider.

Now if you are aspiring to be a businessman in the future, you must have a credit card today, regardless of annual fees.

How to establish credit with a credit card?

Maintaining good standing with your credit card constitutes a good investment for building trust accorded by major financial institutions.

  1. Pay the balance before the due date.
  2. Pay in full.
  3. Don't use up close to your credit limit.

Do that, and in the future, you will have a very good credit score. It would easier for you to get approved in bigger loans on major banks.


Having a credit card should have maximum benefits for a cardholder. A credit card should not be an expense and a convenience in terms of living frugally.

The only reason that a frugal person should get a credit card is when he makes money out of it — by using the credit limit in even a small business. Annual fees are not a joke if you're into saving money.

Lastly, having a credit card that makes you some money in any way is definitely a boost to your financial management.

Are you into saving money? Or are you a credit cardholder? Which side do you choose — having a credit card or saving money without a credit card? Let us know at the comments' area down below.

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Vernie Mallorca is an entrepreneur and blogger with years of experience in selling to institutional accounts. He gradually shifted to blogging when he found out that it is his calling to write timely and helpful articles online that can help others to save money, make money, and secure their future by handling their income smartly. In this blog, he shares both managing your finances, however small it is and valuable information on running a small business.

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